Accountants reveal top 5 EOFY mistakes by SMEs

12 Jun 2014

The end of financial year (EOFY) is just around the corner and
Australia’s EOFY experts have revealed the most common slip-ups SME
clients make around this crucial time of year. These include miscoding
bank transactions and no contact with their accountant over the
financial year.

In an Institute of Public Accountants (IPA) member survey conducted
in partnership with MYOB for the second year running, 56% of
respondents said their clients were almost prepared with submitting
their EOFY statements but just needed to finalise a few things. 40%
said their clients try but need much more preparation, while 4% said
their clients weren’t prepared at all. No respondents said their
clients were completely prepared.

Top mistakes made with EOFY statements

The survey suggests a growing proportion of business operators are
not making contact with their accountant over the financial year and
are not making the most of their accounting software functionality.
However, business operators are making inroads into their accounts and
record keeping:

1. Miscoding bank transactions (65%) – on par with last year's survey

2. Not keeping accounts and records up-to-date throughout the year
(58%), slightly down on 62%

3. No contact with their accountant over the financial year (58%),
up from 42%

4. Does not provide enough detailed or supporting information (49%),
down on 64%

5. Not fully trained up on accounting software functionality (46%),
up from 39%

When asked about the most important steps business operators could
take to prepare for EOFY, accountants ranked 'advise on any major
transactions throughout the year as they happen (sale of land, shares
etc.)' first (91%). Second equal was 'responding to requests for
additional information in a timely manner' (84%) and 'clarity and
consistency of information provided in support of their financial
statement' (84%). Third was 'ensure all documents sent through are labelled/organised'.

IPA chief executive officer, Andrew Conway said, "We encourage
small businesses to draw on the expertise of their public accountant
beyond compliance reporting and income tax returns. Engagement with
their accountant during the course of the year can be very beneficial,
as they can access strategic business and planning advice to help them
become more profitable. They can also be provided with a more holistic
service including assistance with sales and growth forecasts, cash
flow management, accessing funds and succession planning."

MYOB General Manager, Accountants Division, Adam Ferguson said,
“It’s tempting to put the books on the backburner, however lack of
preparation is often the reason why June 30 fills business owners and
their loved ones with dread. 64% of SMEs use an accountant to help
them with EOFY compliance. The small businesses who work closely with
an accountant and also use trusted online accounting solutions are
significantly reducing time-consuming errors.

"It makes life much easier if operators regularly update their
accountant, record all transactions as they occur through the year,
and make the most of time-saving technology. For example, using online
accounting features such as bank feeds where automatically imported
and coded into the software, this daily feed means keeping up to date
with your accounts now takes a lot less time than in days gone by.
Just ensure your provider guarantees highly accurate, reliable and
secure data feeds. This eases the workload for a client and their
accountant and frees up their time to focus on their role as a
business advisor too."

Visit http://myob.com.au/taxtime for a summary of major tax changes,
helpful tips, resources and more.

- ENDS -

For further comment or to arrange an interview please contact:

Angely Grecia

MYOB Public Relations Consultant

P: 02 9089 9071 / M: 0449 169 997 /

E: angely.grecia@myob.com

Wayne Debernardi

IPA General Manager Media & Communications

P: 03 8665 3144 / M: 0417 383 231

E: wayne.debernardi@publicaccountants.org.au

About MYOB

Established in 1991, MYOB is Australia’s leading accounting software
provider. It makes life easier for approx. 1.2 million businesses
across Australia and New Zealand by simplifying accounting, payroll,
tax, CRM, websites, job costing, practice management, inventory,
mobile payments and more. MYOB also provides ongoing client support
via many channels including a network of over 40,000 accountants,
bookkeepers and other consultants. It is committed to ongoing
innovation, particularly in cloud computing solutions, and spends more
than AU$35 million annually on research and development. For more
information, visit myob.com.au.

About the Institute of Public Accountants

The IPA, formed in 1923, is one of Australia’s three legally
recognised professional accounting bodies with more than 25,000
members and students in over 51 countries. The IPA is a member of the
International Federation of Accountants, the Accounting Professional
and Ethical Standards Board and the Confederation of Asian and Pacific
Accountants. The IPA was recognised in 2012 as Australia’s most
innovative accounting organisation and listed in the top 20 in the
2012 BRW Most Innovative Companies List.